32Red Plc
13 December 2006
32Red Plc
('the Company')
2006 Trading update
32Red Plc, the award-winning online casino, poker and sportsbetting operator
today provides a trading update on 2006 performance.
The 32Red online gaming business has recovered well in the latter part of 2006
following the slowdown experienced in the summer. New player sign-ups and
activity levels are pleasing and revenues from the poker operations have moved
forward especially well.
The Company acquired the loss-making sportsbetting operator Bet Direct in June
of this year for a total consideration of £12.5m and trading at Bet Direct has
continued to be difficult over recent months. As highlighted by other operators
in the industry, the months of October and November have seen abnormally high
numbers of successful favourites in UK horseracing markets which has severely
impacted gross win margins experienced by Bet Direct. The Company entered into a
consultation process with the employees of Bet Direct on 10th November 2006 and
whilst the outcome of the consultation is yet to be determined, it is likely
that all or part of the business will be relocated to Gibraltar. Other plans to
move the Bet Direct business to profitability continue to be implemented and the
Board firmly believes that Bet Direct will move into a much improved cash
position in 2007 and will be central to the 32Red business going forward.
As a direct result of poor trading experienced at Bet Direct, the Company
anticipates that the combined operating results for 32Red will fall
significantly below current market forecasts for the year ending 31st December
2006. The lower than anticipated EBITDA performance has resulted in a breach of
the Company's EBITDA covenant with the Royal Bank of Scotland with whom 32Red
has an outstanding loan of approximately £6m.
The Company continues to enjoy a constructive relationship with its Bankers and
has met all interest and capital repayments. 32Red Plc has a cash balance of
approximately £5.3m as of the close of business on 13th December 2006.
The Company intends to provide a further update on 2006 performance during week
commencing 22nd January 2007.
13 December 2006
Enquiries
32Red Plc Tel: 00 35 049 396
Ed Ware, CEO
Jon Hale, Finance Director
College Hill Associates Tel: 020 7457 2020
Matthew Smallwood
Numis Securities Plc Tel: 020 7776 1600
Andrew Dawber
David Shapton
Notes to Editors
32Red is an award-winning online casino, poker and sportsbetting operator
licensed, regulated and based in Gibraltar. The Company is allied to best of
breed partners including Microgaming Software Systems, BarclayCard Merchant
Services and GibTele.Com. For the past 3 years 32Red has been awarded Best
Casino by Watchdog and Player Advocate site Casinomeister.
On 23rd September 2005 the Company listed on the London Stock Exchange's
Alternative Investment Market. In the first half of 2006 the Company completed
the acquisition of UK sportsbetting and gaming firm, Bet Direct, and became
official main club sponsor to FA Premiership Club Aston Villa.
www.32Red.com www.BetDirect.com www.32RedPlc.com
This information is provided by RNS
The company news service from the London Stock Exchange